Flow-Driven Treasury Futures Sell-Off Briefly Spurs Yield Spike

A burst of selling in U.S. Treasury futures on 6 August briefly sent long-end yields to their session highs and sharply steepened the yield curve, market participants said. The move, which had no accompanying economic data or policy headlines, was described as flow-driven rather than fundamentally motivated. The spike proved short-lived. As the large futures positions were unwound, yields retreated from their peaks and the curve flattened from its widest levels. Traders cited the episode as evidence of how thin summer liquidity can amplify price swings in the rates market.